White-Collar Crime
Madoff Aide Pleads Guilty, Says ‘It Was All Fake,’ Judge Nixes $2.5M Bond Deal
Posted Aug 11, 2009 4:21 PM CST
By Martha Neil
After Frank DiPascali pleaded guilty today to carrying out one of the biggest frauds on Wall Street with the help of unidentified "other people" who put together its fictitious books and investment statements, the plan was for the cooperating witness and longtime aide to convicted $65 billion Ponzi schemer Bernard Madoff to be released on $2.5 million bond.
But U.S. District Judge Richard Sullivan unexpectedly said no to the bond agreement between the prosecution and defense counsel, sending the 52-year-old immediately to jail, reports the New York Times. The 10-count case against him includes charges of falsifying financial records, fraud and money laundering.
Although investors in Madoff's securities firm were led to believe they were buying into a hedge fund, “no purchases or sales of securities were actually taking place in their accounts,” DiPascali said in federal court today in Manhattan. “It was all fake. It was all fictitious. It was wrong, and I knew it was wrong at the time.”
He faces a maximum sentence of 125 years in prison, but is expected to get less due to his cooperation, reports the Wall Street Journal (sub. req). His sentencing is tentatively scheduled for May 2010.
Additional coverage:
Bloomberg: "Ex-Madoff Finance Chief Frank DiPascali Pleads Guilty"
Bloomberg (Jan. 2009): "Madoff’s ‘Street-Smart’ Aide DiPascali Was Investors’ Go-To Guy"
Bloomberg: "Madoff Got Cozy With SEC, Ran Ponzi Scheme on Old IBM"
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Comments
B. McLeod
Aug 12, 2009 9:57 AM CST
Good for the judge. It is really open to question how much credit the defendant ought to get for the “cooperation.” The feds had him dead to rights, and he no doubt readily realized that his only hope of ever seeing a release date lay in rolling on as many others as he could.
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James
Aug 12, 2009 7:38 PM CST
The judge should ALWAYS defer to the prosecutor’s request when a plea deal is in place. To do otherwise cuts the prosecutor’s legs out from under him and makes it difficult to get useful information. It isn’t for you or I or anyone else but the government to say how valuable the information is to them.
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B. McLeod
Aug 14, 2009 6:53 PM CST
The prosecutor’s “deal” is to make the recommendation. Both counsel know that the recommendation is not binding on the court. The prosecutor usually reminds defense counsel of that, and defense counsel should always point it out to the defendant.
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